Titanic II Planned by Billionaire Palmer in Chinese Yard

The Titanic sits under scaffolding in the spring of 1911 in this photo made available to the media by the Library of Congress. Source: Library of Congress (George Grantham Bain Collection) via Bloomberg

April 30 (Bloomberg) -- Australian mining billionaire Clive
Palmer plans to build a 21st-century replica of the Titanic and
sail it from England to New York accompanied by the Chinese navy
by the end of 2016.

He has signed a first-stage agreement with Nanjing-based
CSC Jinling Shipyard to build the ship as part of a planned
fleet of luxury liners, the Gold Coast, Queensland-based
businessman said in an e-mailed statement today.

Palmer, whose investments include golf courses, hotels,
coal and iron-ore mining projects, a nickel smelter, a soccer
team and a horse stud, said the ship will have the same
dimensions as the original Titanic. A move into the cruise
market, where ships typically cost at least $500 million to
build, is an ambitious step, Greg Johnson, an analyst with Shore
Capital Group in London, said by phone.

“You’re starting from scratch with no experience,”
Johnson said. “A $500 million punt is quite sizable.”

The Titanic, commissioned by White Star Line, was the
largest liner in the world when built at just under 270 meters
(about 880 feet) and 53 meters high. It sank on April 15, 1912,
after hitting an iceberg east of Newfoundland, costing the lives
of more than 1,500 passengers and crew, according to the
statement. The Titanic II will, like its predecessor, have 840
rooms on nine decks, Palmer said.

Swimming Pools

“It will be every bit as luxurious as the original
Titanic, but of course it will have state-of-the-art 21st
century technology and the latest navigation and safety
systems,” Palmer said, along with gymnasiums and swimming
pools.

Palmer, 58, a former media adviser to Queensland’s late
state premier Joh Bjelke-Petersen, is known for ambitious
projects in varied fields.

In March he was quoted by the Sydney Morning Herald
promising to invest in a blind trust to encourage media
diversity in Australia, and saying that Australia’s Greens party
was funded by the CIA.

He unveiled the Titanic II plan just over an hour before a
separate announcement that he would stand against Australian
Treasurer Wayne Swan in his seat of Lilley at a federal election
due next year.

Challenge to Build

A person on duty at the managing director’s office of CSC
Jinling said by phone that while he wasn’t aware of the deal, it
may have been signed by the company’s marketing and sales
department. Today is a public holiday in China.

The move into the cruise-ship industry, one of the few
areas of heavy manufacturing still dominated by European
companies, would be a challenge for a Chinese company, said Hur
Sung Duck, an analyst at HI Investment & Securities Co. in
Seoul.

“That’s a huge jump for a country that builds mostly bulk
ships” used for carrying coal, iron ore and grains, Hur said.
“I seriously find it difficult to believe it can be built by
that time.”

Italy’s Fincantieri Cantieri Navali Italiani SpA, Norway’s
STX Europe AS and Germany’s Meyer Werft GmbH, are the largest
players in the cruise ship-building market, according to a 2010
presentation by Samsung Heavy Industries Co.

Mitsubishi Heavy Industries Ltd. last November completed
two ships for Carnival Corp., while STX Europe is owned by
Changwon, Korea-based STX Corp.

‘Major Player’

“The Chinese ship-building industry with our assistance
wants to be a major player in this market,” Palmer said in the
statement.

The ship would sail under his company, to be name Blue Star
Line in reference to the Titanic’s owner. China’s navy would be
invited “to escort Titanic II on its maiden voyage to New
York,” Palmer said.

Blue Star Line was registered on April 18 as a wholly-owned
subsidiary of Palmer’s Mineralogy Pty., according to its only
document filed with Australia’s securities regulator. Palmer and
Derek Payne, manager of his Cold Mountain horse stud, are the
only officers listed in the three-page filing.

The mining magnate has a fortune of A$5.05 billion ($5.3
billion) and is Australia’s fifth-richest person, according to
BRW magazine rankings. He is developing coal and iron-ore mines
in Australia, including the $8 billion China First coal project
in Queensland state. Last year, he dropped plans to sell shares
in his company Resourcehouse Ltd. in Hong Kong after commodity
prices fell.